Merrill Lynch says 31% of its trainee advisors are people of color. Other broker-dealers also insist they are working to raise their own levels of diversity and inclusion.
But a recent New York Times report, “This Is What Racism Sounds Like in the Banking Industry,” exposed how deep racial discrimination can be in large institutions. Jimmy Kennedy, a JPMorgan client and former NFL player, was told he was essentially too black to obtain “private client” status, while JPMorgan financial advisor Ricardo Peters was denied a role as a private client advisor.
Zaneilia Harris, president of the RIA Harris & Harris Wealth Management Group, has seen the problem firsthand over her 20-plus years in financial services. The author of “Finance ‘n Stilettos: Money Matters for the Well-Heeled Woman,” who has worked for many of the biggest names in the business, spoke recently with ThinkAdvisor about racism in the business and how to overcome it.
THINKADVISOR: What were your first thoughts after reading the story in the Times?
HARRIS: My first reaction was that it’s really sad that we are still dealing with aspects of inequity in financial services. It’s unfortunate.
There is a lot of talk at the top on the inroads for new people coming into the industry and all the opportunities. But when I look at the trajectory for those [who look like me] to get to the top, the [Times’] story shows no trajectory.
When you look at the leadership [in financial services], there is a strong bias that black people in particular face. We are really struggling to make headway in these large financial institutions.
It leads those who join them to abandon ship and leave the industry or start their own firms. The advisor in the story substantiated that — by leaving to start his own firm.
What’s your overall view of the industry’s limited diversity and inclusion?
This is the reality that gets talked to but sees no real action. When we start to recognize that we all bring something to the table, we all benefit from our varied experiences. But when bias and the scarcity mentality rule, it affects true growth.
There’s still a scarcity mentality — i.e., there’s only so much success in financial services for a small number of people, so I have to protect that [opportunity for myself] at all costs.
I worked at Merrill Lynch during the time of a pending class action discrimination lawsuit; BofA, which bought Merrill Lynch, paid out in 2011. Twelve of the plaintiffs won, including some black advisors, and then after that a group of women won their discrimination suit.
I was there back in the 2007-2008 timeframe. Today, the situation is still the same in financial services. Nothing is being done actively [to broaden leadership diversity]. There’s a lot of talk about diversity and inclusion, but until we see changes at the top — it is all [just] talk.
(Merrill’s parent firm, Bank of America, says that as of 2018, 4.2% of its high-level executives were African American, 3.9% were Hispanic/Latino and 7.3% were Asian Americans; as for first/mid-level management, these figures were 9.4%, 12.6% and 11.7%, respectively.)
What should real change look like?
Changes at the top mean women of color, women in general, black men and other men of color in C-suite and EVP positions that can make change because of leadership and a desire for diverse teams and diverse perspectives.
Right now, the glass ceiling — specifically for black women in financial services — is very high. It seems unattainable to get to senior management.
I’ve been in the industry, including time spent on accounting and other work, my whole career. If you ask me if the JPMorgan situation is isolated, my answer is: I do not think so.
I felt, and still feel, that companies like Merrill are very good at recruiting but not at keeping black advisors [so they can move into management]. I went there to succeed, but what I saw was a lack of progression among peers who look like me.
Overall, the situation in the industry is disheartening. I hoped for an opportunity to grow and mature as an advisor there. Merrill was viewed so highly at the time and still is in some regards as a wealth management firm today. Yet black advisors there [and more broadly] are not succeeding as I and others would like to see them do.
And this leads black advisors to go independent?
I’d found something that I love to do and am passionate about, so I made the decision to start my own firm and now can service clients in my community and in ways I’ve felt would fit and bring value to the community.
The biggest issue is that we do not see the needle moving. It should have moved, even in the recruiting of black advisors. This could have produced career changers.
But people get into these organizations and almost become invisible, as if we bring no value and that our experiences cannot help us connect with those who do not look like us — that people with money are only Caucasian.
Merrill Lynch and other firms wanted [some time ago] to work with regular clients but now only want millionaires and multimillionaires.
That’s why groups like the Association of African American Financial Advisors AAAA (in Washington, D.C.) can be of service to African American advisors and to African Americans.
These types of groups exist and they are really growing as folks learn and see them as offering opportunities to connect with those who look like them.
How does racism affect those of color on a daily basis in the business?
I see micro-aggressions that affect us in small doses. You brush off the first [encounter with racist behavior] and then they keep coming on and affecting your love of the industry.
Some dislike the situation so much, they chose to leave. Survivors have gone through a lot to stay here.
From micro-aggressions to the flat out in your face [race-related] aggression that a lot of us deal with on a daily basis, it can be more common in big firms with people who have different biases.
You cannot make mistakes, are treated more harshly at big firms and are not given needed support. I can be pretty aggressive when I need to be and reached out to colleagues, but they didn’t always want to help me. I felt so alone.
JPMorgan pushed [Peters] into a back office; that did not happen to me, but I still felt alone. I was the only black female trainee hired in my office at the time [in 2006].
There were some other African Americans in the office, but even when they were in the same room with me, I felt alone or questioned whether I belonged.
You have to make a determination [as to whether or not] it is worth it for you to stay. Is going through all this worth it? It affects you mentally and financially, too.
Lots of folks in financial services are high achievers and want to succeed. But the door is slammed in their faces, not closed gently, and they only get so far.
What needs to happen?
I wish the conversation could expand beyond this and actually focus on those who are new [to the business].
I wish those that have been in the industry for 20 or 30 years could all get together to figure out a path of success for those who are new to it and for those coming into it — or thinking about coming into it — later in life or changing firms. It’s not easy for any of these individuals, either.
You try to find a home where you feel comfortable and get the support you need to succeed and grow. Overall, as we’ve seen in the past, the needle is not moving. This is the case throughout the industry — and beyond Merrill.
We need to ask financial services organizations: Who is in senior leadership for wealth management? This, to me, is what truly shows they have moved the needle.
Also, ask for examples of black leaders and not those in marketing or human resources — we need to see those leading advisors as a director or regional director.
What are these organizations doing to really embrace the opportunity sitting before them — to have a diverse workforce that can grow to levels of success and serve, not just a certain caliber of client, but nurturing all on the path to success and helping them achieve it?
People given the right direction can achieve levels of success equal to others who are already there. Some, for instance, high earners not rich yet (HENRYs) can save and invest their way to becoming a millionaire with such direction.
What other types of change would you like to see?
It’s so sad that this is where we are. I’m hoping that the next generation will not all want to start their own firms, and that some will want to be in a Fortune 500 company and to grow there. Maybe I would have done so if I’d seen the pathway.
For me, after having a child, I felt I did not get much support. We need organizations to create an environment in which people feel valued, supported and have a trajectory to move forward with a mentor and sponsor. This will help encourage people to stay.
They’ve got to think of growth. With the changing face of America — into a “majority minority’ nation — what could happen if concentrated power does not change [too] but instead, as with money, just stays with only a few? Then, sadly, we will just see a greater and greater wealth gap.